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The document outlines the two primary types of carbon markets—cap-and-trade and carbon crediting systems—and distinguishes between compliance markets, which are based on obligatory targets, and voluntary markets used for corporate social responsibility. It highlights the role of Article 6 of the Paris Agreement in establishing new international market mechanisms. The text critically assesses carbon offsetting, particularly REDD+ forestry projects, noting that they often generate exaggerated credits and lack adequate safeguards. It concludes that carbon credits cannot scientifically be proven to reliably neutralise one tonne of CO2 and recommends that companies move toward a 'climate contribution' or 'beyond value chain mitigation' (BVCM) model to provide climate finance without making misleading offsetting claims.

The report evaluates transparency in the voluntary carbon market (VCM) by analyzing a sample of 140 projects across the Verified Carbon Standard (VCS), Gold Standard (GS), American Carbon Registry (ACR), and Climate Action Reserve (CAR). It finds that no single standard provides full disclosure, with significant gaps caused by both inadequate rule-setting and insufficient enforcement. Specifically, CAR and ACR have structural limitations regarding the public disclosure of monitoring reports. The study also identifies widespread issues with mislabelled, duplicated, or missing documents, which rating agencies confirm hinder the independent assessment of carbon credit quality. The report recommends implementing stronger quality assurance/quality control (QA/QC) processes, standardized naming conventions, and regular audits to align with Integrity Council for Voluntary Carbon Markets (ICVCM) requirements.

The EU Emissions Trading System (EU ETS) is a cap-and-trade mechanism designed to reduce greenhouse gas emissions in the power, heavy industry, aviation, and maritime sectors by pricing pollution. It operates by setting a decreasing cap on total emissions, divided into EU Allowances (EUAs), which companies can trade or buy at auction. While the system has raised over €152 billion since 2005, its effectiveness has been historically hampered by an oversupply of permits and the extensive use of free allocations to prevent 'carbon leakage'. A separate system, ETS2, will be introduced in 2027 to cover buildings and road transport. The document highlights concerns regarding the environmental integrity of the current cap relative to the EU's carbon budget and the lack of transparency in how member states spend auction revenues.

Carbon Market Watch criticizes the EU's Carbon Removal Certification Framework (CRCF) provisional deal, claiming it allows carbon removals and temporary storage to substitute for actual emission reductions. The organization warns that the framework enables double counting between voluntary markets and national climate policies, incentivizes short-term carbon storage that lacks long-term climate benefit, and employs insufficient sustainability criteria for biomass. While noting some positive inclusions like mandatory biodiversity co-benefits for carbon farming, CMW asserts the CRCF is a 'missed opportunity' that could deter climate action and calls for the deal to be rejected and rebooted.

Carbon Market Watch argues that the draft procedure for appeal and grievance processes under the Article 6.4 mechanism prioritizes limiting access over upholding human rights. The organization recommends a complete rewrite based on principles of accessibility and independence, specifically calling for the removal of all fees for marginalized groups, the expansion of eligibility for grievants to include indirect and potential harms, and the implementation of diverse submission channels beyond online forms to ensure inclusivity for Indigenous Peoples and local communities.

The document explains the distinction between cap-and-trade systems (ETS) and baseline-and-credit mechanisms, detailing the evolution from Kyoto Protocol markets to the Paris Agreement's Article 6. It critiques carbon offsetting for enabling greenwashing and failing to reduce absolute emissions, while highlighting the specific shortcomings of CORSIA and REDD+. The guide advocates for a shift toward a 'climate contribution' approach where credits are cancelled without offsetting claims to support global climate action.

The document explains the distinction between emissions trading systems (ETS) and carbon credit attribution mechanisms, detailing the evolution from the Kyoto Protocol to the Paris Agreement. It critically assesses the effectiveness of various market mechanisms, including Article 6.2 and 6.4, CORSIA, and REDD+, highlighting systemic risks such as 'hot air', double counting, and greenwashing. The guide argues against the use of offsets for carbon neutrality and proposes a 'climate contribution' approach instead.

The document explains the difference between cap-and-trade systems and carbon credit mechanisms, detailing the evolution from the Kyoto Protocol to the Paris Agreement. It critiques carbon offsetting as a tool for greenwashing and argues for a shift toward 'climate contributions' where credits are retired without claims of neutrality.

The document serves as a comprehensive primer on carbon markets, distinguishing between emissions trading systems (cap-and-trade) and credit-based mechanisms. It details the evolution from the Kyoto Protocol's mechanisms to the Paris Agreement's Article 6, while critically assessing the risks of carbon offsetting, such as 'greenwashing' and the 'hot air' problem. The guide also examines the CORSIA framework for aviation and the private certification standards of the voluntary market, ultimately advocating for a shift from offsetting to a 'climate contribution' model.

The document argues that traditional carbon offsetting and 'neutrality' claims are scientifically illogical and misleading. It proposes the BVCM model, where companies provide climate finance as a complement to—not a substitute for—internal decarbonisation. It outlines prerequisites for credible claims, including science-based targets, deforestation-free commitments, and Paris-aligned lobbying, while evaluating different internal carbon pricing methods and investment vehicles like impact funds and direct financing.

The document describes CORSIA as a global mechanism designed to achieve "carbon-neutral growth" by requiring airlines to offset CO2 emissions that exceed a set baseline. It criticizes the scheme for its low ambition, specifically the lowering of the baseline to 85% of 2019 emissions for the period 2024-2035. The author argues that CORSIA is ineffective because it is voluntary until 2027, ignores non-CO2 impacts, and relies on low-priced, low-quality carbon credits that do not incentivize actual emission reductions.

Carbon Market Watch argues that the draft Article 6.4 appeal and grievance procedures prioritize 'abuse prevention' over 'rights protection'. The organization recommends removing financial barriers such as appeal and grievance fees, broadening eligibility for grievants to include potential and indirect adverse effects, and diversifying submission channels beyond online forms to ensure accessibility for indigenous peoples and local communities (IPLCs). It further calls for the Supervisory Body to reopen the call for input and conduct structured consultations with rightsholders.

An open letter from a coalition of academics, NGOs, and businesses calling for a 'firewall' in EU climate policy to prevent carbon removals and land sequestration from being used as substitutes for gross emissions reductions. The signatories argue that 'net' targets risk mitigation deterrence and advocate for three independent targets to be integrated into the 2040 climate target and the EU's updated nationally determined contributions.

Carbon Market Watch argues that the Gold Standard's proposed methodology for coal plant phase-outs is insufficient due to unpredictable economic and political factors, weak eligibility criteria for renewable energy, and inadequate financial and emissions accounting. The organization recommends stricter timelines for developed economies, more rigorous additionality assessments, and the inclusion of construction emissions to avoid the issuance of low-quality credits.

Carbon Market Watch (CMW) reports an estimated 2024 GHG footprint of 39.37 tCO2eq, overshooting its retrospective annual target of 22.61 tCO2eq by 74%. The organization's emissions increased from 34.03 tCO2eq in 2023, primarily due to aviation. Scope 2 emissions, largely from remote work and office energy, are the largest source, while aviation is the second largest. CMW has fully implemented several operational policies regarding ground travel, catering, and sustainable procurement, and maintains an internal carbon levy that raised 3,543 in 2024 to support climate advocacy in the global south.

The EU ETS for aviation currently covers intra-EEA flights, with a potential expansion to global flights pending a 2026 evaluation of ICAO's CORSIA. A key reform is the gradual phase-out of free allowances, with airlines paying for all emissions by 2026. The system is also introducing monitoring for non-CO2 emissions and providing 20 million free allowances until 2030 to support sustainable aviation fuel (SAF) uptake.

Carbon Market Watch (CMW) opposes the current draft of the Free Allocation Regulation (FAR) revision, stating it increases free allowances for industrial sectors and contradicts the political mandate of the EU ETS Directive. CMW identifies critical failures in steel and cement benchmarking, the use of median production levels for Historical Activity Level (HAL) calculations, and an insufficiently ambitious reduction in free allowances for process emissions.

The statement criticises the EU for granting billions of euros in free emission allowances to heavy industry, which it claims contradicts the 'polluter pays' principle. It contrasts the high value of these industrial subsidies with the capped funding of the Social Climate Fund, intended to protect vulnerable citizens from the costs of the new ETS2 system for buildings and transport.

The EU ETS will expand to shipping in 2024, applying the 'polluter pays principle' to cargo and passenger ships of 5,000 gross tonnage and above. The system covers 100% of emissions for voyages between EU ports and 50% for voyages between EU and non-EU ports. Costs will be phased in, starting with 40% of 2024 emissions paid in 2025, reaching 100% by 2027. While CO2 is covered from 2024, methane and nitrous oxide will be included from 2026. Revenue will support the Innovation Fund and member state climate projects, with specific exemptions for ice-traveling ships, certain outermost regions, and small island ferries until 2030.

A joint letter from multiple environmental and industry organizations argues that the European Commission's draft proposal for the Free Allocation Regulation (FAR) revision ignores previous political agreements by continuing to differentiate between steel production processes. The signatories contend that the current FAR incentivizes carbon-intensive iron ore processing over the use of ferrous scrap, which hinders the EU's circular economy goals and the steel sector's alignment with the 1.5°C Paris Agreement limit. They call for a shift to a product-based approach to free allocation to encourage the substitution of ore with scrap and accelerate the transition to net-zero steelmaking.